First, I want to prove to the world that it’s possible to become financially independent at a relatively young age even if you don’t make a lot of money. I don’t make a six-figure income. I never have and I probably never will. But it’s not necessary. Often, people focus on income too much. Expenses are just as important, because if you make $200,000 per year, but spend $190,000 of it, you’ll never become financially independent. Conversely, bringing home $40,000, and learning to get by on half of it means you’ll likely be able to retire if you want to within 15 years or so. Making less means you have less to save, but spending less means you need less to retire off of.
The second reason I do this is because I want this to be a live look at one man’s journey. You can find countless books by financially successful people, but often it’s long after they’ve completed their trek to significant wealth that they’re then telling you how they did it. It’s easy to postulate. It’s much more difficult to actually show the whole process in action, for better or worse.
And finally, knowing that every dollar I spend is going to be published for the world to see serves as reinforcement to stay frugal. There’s been more than one occasion where I decided against a particular expense after realizing I might be a bit embarrassed to write about it.
So each month I will post my income and expenses for the previous month. I track every dollar in and out, so what you see is exactly what I earned and spent (rounded to the nearest dollar).
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What can I say? I’m blessed to continue earning a fairly strong income while doing what I love for a living. This is my first month without a day job paycheck, so it was kind of a wild ride for me to see how things would ultimately turn out.
The biggest category is obviously online income. That includes all income I earn from my online endeavors, including advertising income from this blog as well as freelance writing. This was my second-biggest month ever in this category – behind last month – so I’m very pleased here. Thank all of you for your continued support!
Dividend income was strong yet again. To be in a position where I’m earning hundreds of dollars in a month for essentially what amounts to excellent past decisions is really wonderful. One great decision in your life can reap benefits for your entire life, but repeating great decisions over and over again can truly change your future.
The other income was the redemption of cash back rewards from one of my credit cards. I’m frugal and don’t buy much, but I take advantage of credit card rewards as much as possible by using my Visa as much as possible. It’s wonderful to collect a little cash back on top of knowing that I’m committing a little capital Visa’s way as a shareholder.
Most of my expenditures were pretty well held in check this month.
This will be the last month of $200 rent. I’m still renting a room from my sibling while I look for a more permanent housing situation, but I decided to raise my own rent to $250 for the remainder of my stay. My little niece was recently born and I know the extra $50 can help out. If I stay past the end of the year then I’ll likely raise my rent once again.
Food was high this month. I took a number of people out to eat, including my sister and brother-in-law twice. I’m still in kind of a honeymoon stage being back home in Michigan, so I’ve been spending a little more on food than I’d like. But it was all worth it, as I’ve been super happy spending more time with loved ones.
This will be the last month of $50 student loan payments. I applied for and received a two-month forbearance on my student loans. I actually didn’t have to pay anything, but the $50 covers all interest expenses (so they don’t capitalize) and a little principle. Starting in August, however, I’ll be back to paying more than $200/month on my loans until they’re paid off.
The amusement category was a lot more expensive than usual. Most of this was due to a Detroit Tigers game I attended for July 4th. It was a great time, and worth every penny. My two sisters, their significant others, and myself (I played fifth wheel) all attended the game. It was a beautiful Midwestern summer afternoon, and the fireworks show after the game was almost worth the admission all by themselves.
Auto insurance went down slightly. This was due to a discount I received from plugging in Progressive’s Snapshot device. Score!
I paid $15 for an iPhone 4S cover, so that’s why my mobile phone expense is that much higher than usual. My younger sister’s boyfriend has an iPhone 4S he no longer uses (he now uses a Samsung GS4), and it had a cracked screen. He offered to give me the phone for free if I bought a new screen. I figured that was well worth the expense and ordered a new front screen with back cover online for the $15, and he told me he’d put it on for me. Gotta love family! So my old iPhone 3G from 2009 will be gone pretty soon.
I managed to save 59.2% of my net income this month. I consider that pretty astounding, as this is the first month I’ve ever tracked my budget without the comfort of a conventional paycheck. I’m not quite sure it’ll be like this every month, but I’ll take it when I can get it!
My goal is to save 50% of my net income, averaged monthly. So far, I’ve hit rates of:
- 49.8% – January
- 21% – February
- 59.1% – March
- 51.6% – April
- 18.6% – May
- 72.9% – June
- 59.2% – July
I’m now at an average of 47.5% for the year. I’m climbing back, guys! I’m still short of my goal, but I’m making every effort possible both on the income and expense side of the equation to claw my way back and exceed 50% for the year. It’s a lot tougher than it used to be, but I’m happy to be in a position to take on the challenge.
I expect August to be more expensive with a slightly higher rent tab and normalized student loan repayments. But I’m aiming for 50% again. I’ll do my best!
Full Disclosure: Long V.
How was your budget for July? Did you have a great month for savings?
Thanks for reading.
Photo Credit: Stuart Miles/FreeDigitalPhotos.net